Canaccord Genuity Downgrades GitLab to Buy with $70 PT from $76.

Canaccord Genuity Downgrades GitLab to Buy with $70 PT from $76.

Canaccord Genuity has downgraded GitLab (GTLB) from "Overweight" to "Buy" with a price target of $70, down from the previous $76. The move follows the company's recent earnings report for fiscal 2026 Q2, which highlighted strong revenue growth but a significant decline in profitability.

GitLab reported 29.2% Q2 revenue growth to $236M, but swung to a $0.06/share loss, marking a 175% decline from prior-year profits [1]. The stock fell 2.27% despite raised profit guidance, reflecting mixed market sentiment over recurring revenue strength and persistent losses. CEO William Staples highlighted strategic investments in AI-native DevSecOps and leadership changes, projecting 23% 2026 Q3 revenue growth.

The earnings results indicate a mixed performance, with strong revenue growth overshadowed by a significant decline in profitability. The EPS results are considered negative due to the large deterioration in net income and the continued losses.

Canaccord Genuity's downgrade reflects concerns about GitLab's ability to maintain profitability despite strong revenue growth. The firm cited ongoing financial challenges and the need for strategic shifts to improve profitability.

References:
[1] https://www.ainvest.com/news/gitlab-2026-q2-earnings-misses-targets-net-income-deteriorates-181-7-2509/